How to Overcome the 4 Biggest Obstacles to Electronic Payments Growth

At long last, businesses appear ready to quit paying suppliers with paper checks.

Over the next three years, businesses surveyed by the Institute of Finance and Management expect to make most of their payments to suppliers electronically. Moreover, electronic payments automation – not invoice processing automation – is the top priority of accounts payable professionals for 2019.

However, to achieve this objective businesses will need to overcome four major barriers. Here are the four biggest obstacles to electronic payments growth identified by buyers, and how to overcome them:

1. Supplier resistance:

Convincing suppliers to accept electronic payments has long been perceived as a barrier to electronic payments adoption, with many buyers believing that small suppliers are unable or just unwilling to receive electronic payments.

In any case, the prospect of the additional work required to enroll, on-board and support suppliers as they convert to electronic payments can be overwhelming for AP operations. Finally, this resource constraint and resulting challenges can be easily eliminated, by partnering with a payment solutions provider that offers outsourced supplier enablement and support.

Now businesses can achieve strong adoption of electronic payments among suppliers of all size while avoiding labor-intensive activities such as collecting and managing supplier contact information and payment details.

As a core component of this outsourcing arrangement, payment solutions providers work with buyers to develop customized programs for supplier outreach.

Your vendors are vital to your operations and profitability, so maintaining your supplier relationships, direction and communications preferences are an absolute priority. Once the plan is in place, the payment solutions provider’s team then contacts suppliers to explain the benefits of electronic payments and to register them to receive their preferred payment method.

2. Lack of IT resources:

A shortage of IT resources is frequently identified among the top barriers to migrating from paper checks to electronic payments. Many buyers cite competing technology initiatives (ERP upgrades!) as a big obstacle to winning approval for payments automation projects.

Companies are now overcoming these approval challenges with payment solutions like the one offered by ACOM. Their solution only requires an approved-invoice file from the buyer’s ERP to process and execute payments in any preferred payment method.

This operation requires no changes to the buyer’s accounts payable or ERP application, making payments seamless and requiring little or no effort from internal staff. And since payment solutions are delivered via the cloud, there is no costly hardware to implement and support and system upgrades are not required. And cloud-based deliver

3. Inadequate remittance detail:

The lack of rich remittance detail makes it difficult for accounts receivable departments to properly apply customer payments. In fact, missing or incorrect remittance data can often grind the receivables process to a halt.

Providing suppliers with the rich remittance data they need helps them to streamline receivables posting and reconciliation – and creating less strain on accounts receivable is a proven way to increase supplier adoption of electronic payments.

Electronic payment solutions such as ACOM’s, will automatically deliver rich remittance data electronically, in any format suppliers require and without character or source file limits on remittance detail. Suppliers can also access remittance detail at will via an online portal.

4. Integration issues:

Business identify inadequate integration between their existing systems and electronic payments applications as a barrier to electronic payments growth. This can present a serious obstacle, as poorly integrated systems can make it difficult to initiate payments, verify their receipt and settlement or to reconcile the payments with invoices.

Ensuring strong connectivity between electronic payments solutions and ERP applications and supporting systems is clearly the determining factor for businesses hoping to wean themselves off paper checks to suppliers. Unlike some approaches to paying suppliers, electronic payment solutions, such as ACOM’s payment platform, connect with a buyer’s legacy systems to preserve the existing process and its controls and approvals.

This seamless approach allows the electronic payment solutions to connect with virtually any ERP, accounting or other back-office application, as well as any depository bank.

Check payments are finally losing their grip on business-to-business commerce.

But still, many buyers are unsure of how to overcome the perceived obstacles to the growth of electronic payments – such as supplier resistance, overwhelmed IT resources, inadequate remittance detail, poor integration between electronic payment solutions and legacy applications. Advanced electronic payment solutions address and overcome these obstacles by helping buyers reduce their volume of paper checks.

Want to grow the volume of electronic payments your business makes to suppliers in 2019?

Contact us to arrange a no-obligation consultation with one of our electronic payment experts.